BNP Goes Down Under

BNP Residential Properties(BNP Quote - Cramer on BNP - Stock Picks), a North Carolina-based apartment REIT, agreed to be acquired by Australia's Babcock & Brown for $316 million.

Babcock & Brown will pay $24 a share for BNP, a 39% premium over Wednesday's closing price of $17.24. Babcock & Brown also will assume or refinance $450 million of BNP's debt, bringing the deal's total value to about $716 million.

The acquisition comes as apartment real estate investment trusts have seen strong performance over the past year, benefiting from limited new supply and the growing lack of affordability of buying a home.

"Babcock & Brown's primary interest in BNP is its high quality apartment portfolio of 8,180 apartment units in North Carolina, South Carolina and Virginia, with an average age of 14 years, which it owns and operates," said Dan Brickman, head of U.S. real estate for Babcock & Brown. "The overall portfolio occupancy is currently over 95% and rental rates are experiencing strong growth from continuing improvement in market conditions."

The deal is expected to close in the fourth quarter.